The Halcyon House Is Building a Social Good Startup Mafia

November 24, 2015

DC Inno

Of the startups who have completed part one of Washington, D.C.-based The Halcyon Incubator's three part program, 93 percent have subsequently received funding from private investors, Halcyon program manager Ryan Ross tells DC Inno. That frequency of investment for incubator alumni represents an abnormally high and equally impressive mark that, Ross said, is a testament to the "rockstar founders" and promising "market indications" they have already seen.

For reference, nationally hailed Herndon, Va.-based cybersecurity accelerator Mach37 boasts a 65 percent mark, with 11 of 17 applicable companies pulling in cash since completion of the 90-day accelerated curriculum. This figure is important primarily because it represents a payoff to the program, Mach37 entrants trade about an 8 percent equity stake in their respective companies for admission. In short, these startups expect a return on their work.

The Halcyon Incubator, unlike the industry standard, does not require any equity in exchange for participation.

"This application cycle was our [Halcyon's] most competitive yet, and the scrutiny level of our review process was higher than ever. The most successful applicants were able to articulate a clear pain point, not just ageneral problem, and were clear about how their solution solved the challenge at hand. The fellows who made it through did a remarkable job of pairing their innovation with a clear model that would solve for a specific pain point," Ross explained.

The goal of traditional incubator members is typically, among other things, to develop products and the business, add valuable contacts and ultimately to secure investment in order to further scale operations. An exceptional investment to graduation ratio is big for the incubator biz.

"Halcyon has a long timeline and the program has only been running for 18 months [in total], so currently all of the companies are still connected to the program," said Ross.

Outlook

Translating a business idea into a profitable organization and moreover, something worthy of outside investment, is an immense challenge for most. To do so when the business in question maintains an identity that, in the name of social good, sometimes sacrifices greater profit in the name of a larger mission, can be even more difficult.

That's the challenge that many social entrepreneurs face; those with startups aimed at dually solving a humanitarian or social issue while building a self-sustaining business. Ross and co. are proving that these businesses can, in fact, raise capital with the right direction and preparation.

Last week, the social good tech incubator, located in Georgetown, announced its fourth cohort of accepted companies and entrepreneurs, which will move into the house in February. Interestingly, seven out of the eight companies in this latest group are currently headquartered in the D.C. area. WinterHyde, based in Singapore, was the only venture not from the DMV area.

"We see the uptick in the quality of applications from our region as a great sign of how much progress the local innovation community has made," Ross said.

Halycon doubles as a home to the startup founders it mentors and is owned by the non-profit S&R foundation. It occupies a renovated mansion property with a view of the Potomac River on Georgetown's historic, west end.

"The new cohort at the Halcyon Incubator raises the bar yet again for early-stage social entrepreneurs. Impact is at the core of each of these dynamic ventures, and our work with 32 social enterprises has reinforced how important it is to support these startups as they tackle some of societies biggest challenges," Ross told DC Inno.

The aforementioned three-part structure is divided as such: fellows only spend the first five months in residency, living at the property and using its facilities. After which, they use the incubator as a headquarters for another seven months during the second phase. The last six months, which encompasses the program's third phase, is completed in a local WeWork at a "greatly" reduced rate.